section 3completing the work sheet and journalizing and posting the adjusting entries what you’ll...
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Completing the Adjusted Trial Balance Section Once the adjustments are entered in the Adjustments section of the work sheet, it is important to prove that the accounts are still in balance. This is done by completing an adjusted trial balance. Section 3Completing the Work Sheet & Journalizing & Posting the Adjusting Entries (cont'd.)TRANSCRIPT
Section 3Completing the Work Sheet and Journalizing and Posting the Adjusting EntriesWhat You’ll Learn
How to complete the Adjusted Trial Balance section.
How to extend amounts to the Income Statement and Balance sheet sections.
How to report the net income or net loss for the period.
How to journalize the adjusting entries in the general journal.
How to post the adjusting entries to the general ledger.
Why It’s Important
The work sheet is the source
of information for journalizing the
adjusting entries and preparing
the financial statements.
Section 3 Completing the Work Sheet & Journalizing & Posting the Adjusting Entries (cont'd.)
Completing the Adjusted Trial Balance Section
Once the adjustments are entered
in the Adjustments section of the work
sheet, it is important to prove that the
accounts are still in balance. This is
done by completing an adjusted trial
balance.
Section 3 Completing the Work Sheet & Journalizing & Posting the Adjusting Entries (cont'd.)
Extending Amounts to the Balance Sheet and Income Statement Sections
Beginning with line 1, each account balance in the Adjusted Trial Balance section is extended to the appropriate column of either the Balance Sheet section or the Income Statement section.
Section 3 Completing the Work Sheet & Journalizing & Posting the Adjusting Entries (cont'd.)
Completing the Work Sheet After all amounts are extended to the
Balance Sheet and Income Statement sections, a single rule is drawn across the columns in these sections.
All four columns are then totaled.
The difference between the two column totals in each section is the amount of net income (or net loss) for the period.
Section 3 Completing the Work Sheet & Journalizing & Posting the Adjusting Entries (cont'd.)
Completing the Work Sheet (cont'd.)
After the net income (or net loss) is recorded, the columns in the Balance Sheet and Income Statement sections are ruled and totaled.
A double rule is drawn across all four columns.
Section 3 Completing the Work Sheet & Journalizing & Posting the Adjusting Entries (cont'd.)
Journalizing Adjustments
The journal entries that update the
general ledger accounts at the end of
a period are called adjusting entries.
The source of information for
journalizing the adjusting entries is
the Adjustments section of the work
sheet.
Section 3 Completing the Work Sheet & Journalizing & Posting the Adjusting Entries (cont'd.)
Journalizing Adjustments (cont'd.)
Section 3 Completing the Work Sheet & Journalizing & Posting the Adjusting Entries (cont'd.)
Posting Adjusting Entries to the General Ledger
After the adjusting entries are recorded in the general journal, they are posted to the general ledger accounts.
Once the adjusting entries are posted, the general ledger accounts are up-to-date.
Section 3 Completing the Work Sheet & Journalizing & Posting the Adjusting Entries (cont'd.)
Check Your Understanding
Which types of general ledger
accounts appear in the Balance
Sheet section of the work sheet?
Section 3 Completing the Work Sheet & Journalizing & Posting the Adjusting Entries (cont'd.)